TORONTO, June 18 (Reuters) - The Canadian dollar weakened to a 14-month low against its U.S. counterpart on Thursday after the Federal Reserve's hawkish shift a day ago led to a wider gap between U.S. and Canadian bond yields.
The loonie was trading 0.3% lower at 1.4135 per U.S. dollar, or 70.75 U.S. cents, after touching its weakest intraday level since April last year at 1.4146.
"Every major currency is down against the greenback as traders ignore domestic developments and follow rate differentials," Karl Schamotta, chief market strategist at Corpay, said in a note.
The U.S. dollar added to the previous day's gains against a basket of major currencies as traders ramped up bets on Fed interest rate increases this year.
Canada's 2-year yield fell 3.1 basis points further below its equivalent U.S. rate to a gap of 137 basis points, marking the widest spread since May 2025.
Falling oil prices and trade uncertainty have also contributed to declines for the loonie, Schamotta said.
U.S. President Donald Trump on Wednesday said that the United States would do better without the U.S.-Mexico-Canada Agreement on trade and that he would prefer not to have a new one, but added that he was open to doing it.
The price of oil, one of Canada's major exports, fell to its lowest level since before the start of the Iran war at the end of February as an interim deal to end fighting, reopen the Strait of Hormuz and ease sanctions on Tehran boosted the global supply outlook.
U.S. crude oil futures were trading 1.9% lower at $75.30 a barrel, while Canadian government bond yields eased across the curve.
The 10-year was down 4.8 basis points at 3.372%, after earlier touching its lowest level since March 9 at 3.356%.
Reporting by Fergal Smith; Editing by Will Dunham
